Rishi Dixit and Others v. Preventive Life Care Pvt. Ltd.
In the Telecom Disputes Settlement and Appellate Tribunal
Cyber Appeal 2/2014
Before Mr. Shiva Kirti Singh, Chairperson and Mr. A.K. Bhargava, Member
Decided on May 21, 2019

Relevancy of the case: Compensation for unauthorised duplication of data

Statutes & Provisions Involved

• The Copyright Act, 1957 (Section 13(1)(a), 63B)
• The Information Technology Act, 2000 (Section 2(k), 2(o), 43(b)(i)(j), 44, 45, 47, 66)
• The Patents Act, 1970 (Section 90)

Relevant Facts of the Case

• In January 2013, the complainant filed a civil suit and criminal complaint against the appellants.
• In their complaint, the respondent alleged that since January 2011, A-1 and A-2 without authorisation and having mala fide intention, dishonestly and secretly forwarded and stole some sensitive and confidential algorithm, formulas, process, etc. from the computer network of the respondent.
• Using the said information to replicate the business model of the complainant company, by forming a company named Navigene Genetic Science Pvt. Ltd. (A-3) and providing similar and identical services as that of the respondent, the appellants caused huge financial loss and damages to the respondent.

Prominent Arguments by the Advocates

Counsels for the Appellant:

• Dissimilarities in the report are pointed out, some of which are (i) the first page is entirely different (ii) Appellant’s report does not have charts which are a characteristic part of respondent’s report (iii) A-3’s report has 133 markers as against 130 of the respondent, which covers 110 disorders as against 101 of the respondent and list/names of several disorders covered are different, (iv) there are several spelling errors/differences in the appellant’s report which are not present thereby showing that the appellant’s reports are hand-typed in MS word and not made using respondent’s software, (v) control values of the markers are absolutely different for each of the 133+ markers in both the reports. On examination, it was found that these differences are significant for the purpose of report generation. An output obtained by using stolen software cannot account for such dissimilarities.

Counsels for the Respondent:

• The Council submits Navigene was incorporated on 30-4-2012 with A-1 and A-2 as promoters of the company. Thus, while A-1 and A-2 were still employed with the respondent company, they were promoting parallel and competing business company. To run a competing business, appellants illegally transferred some of the sensitive and confidential information, including analysis reports, parameters, data values and other sensitive data of the respondent company in their individual email accounts and storage devices while they were still working for the respondent.

Opinion of the Bench

• Learned AO has estimated a composite amount of Rs. 30 Lakhs by which the respondent is to be compensated for all the violations under the Information Technology Act, 2000. He has spelt out the method adopted by him in arriving at this figure and has given a rationale for the same. In view of this, we rely on his estimate. However, only one of the two charges were found to be sustainable under the Information Technology Act, 2000.
• Instead of all the appellants, it was also found out that only A-1 and A-3 are liable for the violation of section 43(b) read with 43(i) and 43(j). According to the facts of the case, we, therefore, hold that a compensation of Rs. 15 Lakhs will be just and fair. Learned AO has also granted compound interest of 12% in case the amount is not paid within one month of the impugned order.

Final Decision

• Appellant-1 and appellant-3 to jointly pay a composite compensation of Rs. 15,00,000 to the respondent along with a simple interest of 8% from the date of the impugned order i.e. 20-1-2014 till the date of payment.
• The appeal succeeds to this limited extent. No order as to costs.

This case summary has been prepared by Mansi Vats, an undergraduate student at UPES School of Law, Dehradun, during her internship with The Cyber Blog India in June/July 2020.